AD industry deeply disappointed by RHI timetable

The incentive will offer operators of facilities such as AD plants and biomass plants, as well as other waste-to-energy technologies, payment for every kilowatt hour of renewable heat they generate.

The Department of Energy & Climate Change (DECC) published its timetable for the implementation of the scheme on Monday (March 26), revealing that it will only begin consulting on how it will support new technologies in the non-domestic sector by September 2012. These technologies are only then likely to be included in the incentive by summer 2013.

ADBA

ADBA, which represents the interests of the UKs anaerobic digestion industry, has criticised the timeframes set out by the DECC.

In a statement, the Associations chairman Lord Redesdale, said: The timetable for the RHI announced by DECC this week is deeply disappointing, and risks breaking the governments commitments on renewable energy including their promise to support a huge increase in energy from waste through anaerobic digestion.

For example, support for heat use from biogas combustion is limited to 200kWth, which means many AD projects are unable to make full use of the heat they produce. When DECC brought that limit in they said it was temporary so to hear that it may stay until summer 2013 is a source of huge frustration.

Cost Control

Alongside the timetable, DECC also published a consultation into interim cost control measures for the RHI, that would suspend the incentive until the next financial year if the cost of the scheme is likely to exceed its budget. The consultation, which is open until April 23, is seeking views on whether a notice period of up to one month should be given prior to any suspension of the scheme.

ADBA claims that the government is at risk of discouraging investment in the AD industry by proposing policy on cost control instead of supporting the development of renewable energy.

Lord Redesdale said: Instead of progress on issues such as support for biogas combustion, government are proposing policy on cost control which risks putting off investment and which their own consultation document shows is unnecessary.

ADBA will be working hard to see if we can get an earlier decision on extending support for heat use from biogas combustion, which would help countless AD projects, heat users who want to switch to green energy, and the economy more widely.

REA

These concerns have been echoed by the Renewable Energy Association (REA), which described the governments decision to launch a consultation into cost control for the RHI as premature and unhelpful.

REA chief executive Gaynor Hartnell said: To launch an official consultation on bringing the shutters down, having only just fired the starting gun on the RHI is premature at best.

The renewable heat market isnt going to flare up like solar did. If anything were concerned about an underspend. Were totally supportive of getting effective cost control measures in place, done properly this will be reassuring to the industry.

In our opinion this consultation on interim cost control is unnecessary and unhelpful, but its certainly not a reason for lenders to become alarmed – particularly as government intends to remove this power when longer-term control measures are in place.

CRC

Meanwhile, DECC yesterday (March 27) unveiled proposals to simplify the Carbon Reduction Commitment Energy Efficiency Scheme (CRC), intended to cut the administrative costs of participants by up to two-thirds. The mandatory scheme requires large businesses and public sector bodies to purchase allowances based on their carbon emissions, giving them an incentive to improve their energy efficiency.

Under the proposals the qualification process for the scheme will be shortened, and the amount of reporting required by businesses will be reduced. The proposals also remove the requirement on facilities covered by the Climate Change Agreement or EU Emissions Trading System to purchase CRC allowances.